Elias Pungong, Honorary Consul for the United Kingdom, Chairman Rodeo GTL Fuels.
What is the state of the petroleum sector in Cameroon?
In Cameroon, many people don’t understand when we talk about the Petroleum Sector. Let’s me take a moment to briefly explain. The Petroleum sector is made up of two strands: Oil and Gas. Let me address each one in turn.
The Oil Sector in Cameroon is in long term decline and has been the case for many years. The level of oil production today is almost a third of the levels in the 1980s. Cameroon Oil fields are old and mature, with very little exploration going on. All the Oil Majors (biggest Oil companies in the world as they’re called) TotalEnergies, ExxonMobil, Texaco and Shell have long exited from Cameroon. There are hardly any new entrants into the Sector and that’s a verifiable fact. Furthermore, the entire global economy is currently adapting to what I can term as the ‘Carbon Zero’ agenda. In short, fossil fuels like oil are getting out of fashion and everyone is embracing renewable energies and Electric vehicles, leaving little or no room for the long term survival of the oil sector in general around the world and in Cameroon in particular. Therefore, I can safely conclude that the oil sector is in long-term free fall and terminal decline.
Gas on the other hand is more promising and Cameroon has lots of it. Main reserves found on the Etinde field off Limbe coast, Sanaga Sud, Yoyo field, Matanda off Douala and well known field of Logbaba. Gas is considered cleaner than oil though still fossil but can be used to produce clean Electricity as a replacement for dirty residue fuels. This is very good and the upside potentials for Cameroon is very promising indeed if we can attract the right investors and make Cameroon a good place to invest.
What assessment can you make of the SONARA fire disaster and the impact on the sector?
As a refinery, SONARA has never been competitive. It was old and outdated, though there have been ongoing plans to modernize which was good. Oil products in Cameroon were heavily subsidized by Government through the CSPH. SONARA has been the most indebted institution in Cameroon after the Government itself. The SONARA fire was both good and bad. Good because it will push the Government of Cameroon to go back to the drawing board and rethink its strategy in this area. Bad because it’s an obvious financial and economic disaster for Cameroon.
Some areas like natural gas are picking up while domestic gas is witnessing shortfall in production. What can be done to improve the sector generally in order to boost economic growth?
The response here is very simple. We must stimulate investment. More investments in the gas Sector would mean more discoveries which will lead to more development and lower gas prices. How can we stimulate investments? Through the SNH which manages the sector. The SNH needs reforms. It needs to be realigned to the modern era, both in terms of structure and policies. But it’s only normal that after almost 45 years of existence any such important institution would need to modernize itself, look more outward and adapt to the new world of opportunities and capital.
Are there prospects in developing new oilfields or new investments in the sector?
Yes, Cameroon has a lot of upside potentials, especially in gas. I have always said that Cameroon is more of a Gassy country than oil. However, the government through the SNH must make Cameroon more attractive to foreign investors. We must attract and retain foreign capital because this sector requires extremely high Capital investments which can only be raise through foreign direct investors or more developed Capital Markets. In the prior questions, I have raised the issue of a fundamental reform of the SNH. The Government must address this in order to attract new investors into Cameroon. If we don’t do it, then we must be prepared for a continuous decline of this sector which of course would affect economic growth and poverty alleviation.